Smith wants to phase in corporate tax rate cuts

John Arthur Smith, chairman of the Senate Finance Committee, said he supports lowering the state’s corporate tax rate, but doesn’t want to enact the cut all at once, according to the Santa Fe New Mexican.

“I told the governor I’m apprehensive about what we’re doing because we have to pay our bills,” Smith told the New Mexican. “It’s very, very difficult for me to jump out and say we’ll pass this without knowing what the cost is to the state.”

Smith aims to “more carefully craft a tax policy,” and is working on a bill that will be dropped before the Feb. 14 filing deadline passes, according to the New Mexican. His goal would be the same as his Democratic colleagues in the House: close other tax loopholes and tighten up poorly drafted legislation to find enough revenue for a corporate tax reduction. And do it slowly.

“She [Gov. Susana Martinez] will get her corporate, and we will get to tighten it up on some of the others. The balancing act is how much are we tightening it up, and how much are we giving away on the corporate. I know, I’ve got a couple days, I’ve got to get something dropped,” he told the New Mexican.

Smith told the New Mexican he still remembers challenging former Democratic Gov. Bill Richardson and his own caucus several years ago on what turned out to be too-optimistic revenue projections — a scenario that contributed to a state hiring freeze and spending cuts in the year before Gov. Susana Martinez took office.

Smith said he has the same cautions for Martinez, a Republican who wants to reduce the highest corporate income tax rate by one-third, to 4.9 percent from 7.6 percent, at a cost of $130 million to the general fund, according to estimates, the New Mexican reported.